KUALA LUMPUR: Prime Minister Tun Dr Mahathir Mohamad said the government will have to bear the loss of “a very large sum of money” if it decides to cancel the Kuala Lumpur-Singapore High Speed Rail (HSR) project.

To avoid this, he said the Pakatan Harapan-led government will have to find ways to reduce the amount of money it would have to pay for breaking the agreement made by the previous administration.

“The terms of the agreement (for the HSR) are such that if we decide to drop the project, it will cost us a lot of money. We have entered into an agreement with Singapore,” he said in an interview with The Edge Weekly.

The RM100 billion project is one of several infrastructure plans initiated by ousted prime minister Datuk Seri Najib Razak’s administration, which is under review by the new government.

Another mega-project being scrutinized is the RM60 billion East Coast Rail Link (ECRL).

Dr Mahathir – who voiced opposition to the continuation of the ECRL project – described it as a “strange” contract, as Malaysia has to fund the project with a loan from China, while also hiring contractors from that country.

“That contract is strange. The contractor must be from China and the lending is from China.

“And the RM55 billion loan from the Export-Import Bank of China is not supposed to come here, but (kept abroad) to pay the contractors in China,” he said.

When asked if money borrowed for the project will not be brought into the country, Dr Mahathir answered in the affirmative.

“That was the arrangement. And the payments to the contractors – China Communications Constructions Co Ltd – are supposed to be made on staggered terms regardless of (the stage of) work done. It is not progress payments (based on work done),” he added.